Low Global Prices Block Australia Sugar Expansion

According to the national forecaster the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES), Australian sugar cane production seems to remain stagnant over the medium term at around 34 million tonnes due to global sugar prices and competition.

ABARES reported that the world indicator price for raw sugar, on the New York Intercontinental Exchange, nearby futures, no. 11 contract is forecast to fall to US12.5 cents per pound in 2018–19. It is currently US12.56c/pound, reflecting what ABARES data showed in regard to supply and demand, with global production is expected to exceed consumption for the second year in a row, increasing stocks.

As per report published in Northqueenslandregister.com, Australian sugar industry observing the government policy of India, where the government stepped in after the mounting cane arrears in the country.

This is likely to have the end impact of India exporting less sugar but on the flip side, Brazil is likely to export more, filling the gap left by India’s reduced supplies.

Yet, there is better news in the longer term, with production likely to be outstripped by consumption, partially due to a switch out of sugar in places such as Thailand, where cassava is emerging as a more profitable crop.